Tom Cruise is free from studio system

LOS ANGELES  - Take all the PR spin out of last week's announcement that Tom Cruise and his producing partner Paula Wagner are reviving the United Artists studio, and what's left?

Standing to gain from the deal are UA's MGM parent, which aspires to return to full studio status; Cruise, whose star has become slightly tarnished; Wagner, who ascends to executive status; and Creative Artists Agency, which represents both Cruise and Wagner. And, as a bonus, the film industry gets a much-needed new buyer. What's not to like?

But the bottom line: It remains to be seen whether Cruise and Wagner can produce a slate of commercial movies that MGM can release effectively.

While MGM boasts a legendary brand name, it is still an independent distributor trying to climb into contention as an international studio by adding a global movie star to its stable. After a year as MGM CEO, hard-boiled businessman Harry Sloan has seen what a tough slog it is to release movies in a ruthlessly competitive marketplace.

While it is by no means clear that Sloan's innovative bare-bones new studio paradigm will grow into a raging success, adding an international megastar to the equation will certainly make Sloan's overseas partners happy -- as long as Cruise stars in some of the movies. "UA will supply a steady flow of product for our worldwide distribution structure," MGM chief operating officer Rick Sands says. "We believe these talented people can create four commercial movies a year." Word is, the announcement of the first UA movie next week will be a big-budget actioner starring Cruise.

With the announcement of the UA takeover, Cruise took yet another step in his painstaking recovery from the PR missteps that led to his public dismissal from his $10 million-a-year studio deal at Paramount Pictures this summer. No matter what happens, Cruise's name is now linked forever to the founders of the legendary United Artists of movie lore -- Charlie Chaplin, Mary Pickford, Douglas Fairbanks and D.W. Griffith. "We're looking to re-establish what UA represents: a studio founded by artists to control their own destiny," Wagner says.

Which is not to say that Cruise is running a studio -- at this stage, UA has been revived as a label, at best -- or that his creative acumen will guarantee MGM a slate of robustly commercial pictures. Nor is Cruise, who is free to make movies anywhere, "committed" to starring in any UA pictures, though he is certainly expected to do so, his attorney Bert Fields points out. The heavy lifting at UA will be done by Wagner, his partner of 14 years, and their CAA agents.

Cruise, 44, now has an opportunity to break free from the strictures of the studio system that have bound him for his entire career. While Cruise and Wagner have demonstrated excellent taste in their productions -- outside the "Mission" series, they co-produced Edward Zwick's "The Last Samurai," and oversaw Nicole Kidman's "The Others" -- they have not demonstrated infallible marketplace instincts.

They have picked terrific directors slightly off the beaten path such as John Woo and J.J. Abrams to helm the "Mission" movies, and also have taken risks with filmmakers such as Cameron Crowe. (Both of Crowe's films, "Vanilla Sky" and "Elizabethtown," were adventurous films that might have turned out better divorced from the inflated budgets and expectations of the studio system.) To his credit, Cruise championed Joe Carnahan's "Narc" and wanted the indie upstart to direct a "Mission" sequel, though the two ultimately parted ways.

MGM and its consortium of owners now plan to build the new UA into its production arm and hope to attract outside investors. Without spending a dime of their own money, the new Cruise/Wagner now own some 30% of UA, which is paying Wagner to run it as CEO. What the company is actually worth will depend on their performance, Fields admits: "If Tom Cruise generates billions, as he has in the past, it will be worth a lot."

For starters, the duo plans to produce about four movies a year in the $40 million-$60 million range, which is low for a studio, though lower and higher budgets are possible. "It could represent a move for the future where brand-name talent needs less of a large infrastructure to get to the audience," says attorney John Sloss, at movie consulting firm Cinetic Media.

Clearly, the new UA is neither the art film subsidiary it was most recently, nor a fully financed major studio. Wagner -- a former agent at CAA, where her husband, Rick Nicita, remains as a partner -- sees UA as a "hybrid of a studio and a production company. We'll keep it lean, with slim development. We're open for business."

Meanwhile, Redskins and Six Flags owner Dan Snyder will continue to fund overhead for C/W Prods. Wagner and CAA will sit down soon with Paramount to divvy up the fate of their old projects, including the "Mission" franchise.

With coveted green-light power at her disposal, Wagner is thrilled to break free of the confines of the studio system. But she has no intention of reinventing the wheel. She's looking for cost-conscious, mainstream, midrange films that are not genre specific, whether high-concept or character or story driven.

"We won't take production credit on something if we don't produce it," Wagner says. Money will come to the label from MGM and its backers as well as outside investors, Fields says. And Cruise and Wagner will attract strong material from agencies and producers. CAA is sure to guarantee them access to strong material as well. This gives MGM an enormous boost. "CAA has been enormously helpful," Fields says. "They have been major architects. The agencies are now helping to raise funds for stars."

Clearly, it's in CAA's interest to keep Cruise at the top of his game. CAA insiders admit that they are invested in the success of UA and will do everything they can to make it succeed. "It was a very smart move that CAA made," attorney Linda Lichter says. "It has the potential to be another option for interesting movies."

Other agencies have certainly assisted their clients in finding financing for projects -- ICM, for example, lent considerable support to star client Mel Gibson when he went entrepreneurial with Icon Prods., the foreign sales and production company that backs most of his films. But the UA deal now brings a major agency into a very close relationship to a studio; CAA will have something of a vested interest in UA's success. It was always frustrating to the late, great Lew Wasserman when he was an agent that he couldn't produce movies. That's why he gave up the agenting business to buy Universal Studios. As all of the agencies become more involved in packaging and assembling movies for their clients, CAA's work with Cruise and Wagner's UA is sure to be closely watched.

The real test here is whether the new MGM/UA will be able to think enough outside the box to truly test a new paradigm. If it allows habit to dictate that future ventures follow the grand old studio-scaled economies, it will miss a great opportunity to show the industry what could be done by reformulating the old rules.